What administrative law can teach the trademark system.

Author:Wasserman, Melissa F.
Position:Introduction through II. The Trademark Office and Administrative Law Doctrine C. Factual Determinations 1. Deference Jurisprudence with Respect to Factual Determinations, p. 1511-1551
 
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In 2014, the Patent and Trademark Office ("Trademark Office" or "Agency") made national headlines when it cancelled the Washington Redskins' trademark registration. The Washington Redskins, a National Football League team, is valued at a staggering 2.4 billion dollars, of which a substantial portion of this value is attributed to the Washington Redskins brand. Whether the Trademark Office's cancellation of the mark REDSKINS will be upheld in federal court will depend intimately upon the application of administrative law to the Agency's decision. Yet the trademark community has tended to pay little attention to administrative jurisprudence and concomitantly the proper standard of review that should be afforded the Trademark Office's actions. This Article begins to rectify this deficiency by starting to explore, in a comprehensive manner, the intersection of trademark and administrative law.

In doing so, it makes two primary contributions. First, this Article argues that the deference jurisprudence of the US Court of Appeals for the Federal Circuit, which hears the majority of Trademark Office appeals, is wrong as a matter of doctrine. More specifically, it contends that the Federal Circuit fails to afford the Agency sufficient deference with respect to both the Trademark Office's legal and factual determinations. Second, this Article posits that the proper application of administrative law principles to the Trademark Office's decisions results in a normatively desirable outcome. Affording the Trademark Office's decisions more deference, and hence elevating the role of the Agency in trademark disputes, ushers the trademark system into the modern administrative era, which has long recognized the deficiencies associated with judge-driven policy.

TABLE OF CONTENTS INTRODUCTION I. USING TRADEMARK REGISTRATIONS TO IMPLEMENT THE GOALS OF TRADEMARK LAW A. The Primary Goal of Trademark Law B. The Inquiry into Trademark Registration C. The Formality Associated with the Trademark Registration Process II. THE TRADEMARK OFFICE AND ADMINISTRATIVE LAW DOCTRINE A. Trademark Law and the APA: General Considerations B. Legal Determinations 1. Deference Jurisprudence with Respect to Legal Determinations 2. Applying Deference Jurisprudence to the Trademark Office's Legal Determinations C. Factual Determinations 1. Deference Jurisprudence with Respect to Factual Determinations 2. Applying Deference Jurisprudence to the Trademark Office's Factual Determinations D. Do the Standards of Review Really Matter? III. IMPLICATIONS OF THE TRADEMARK OFFICE'S ELEVATED ROLE ON FEDERAL COURTS' VALIDITY DETERMINATIONS TV. THE NORMATIVE CASE FOR DEFERENCE: COMPARATIVE INSTITUTIONAL ANALYSIS A. Expertise B. Capture and Institutional Bias CONCLUSION INTRODUCTION

The Washington Redskins, a National Football League ("NFL") team, is valued at a staggering 2.4 billion dollars, making the franchise the third most lucrative in the NFL. (1) A substantial portion of this value is attributed to the Washington Redskins brand, which the franchise has sought to protect by federal registration of the REDSKINS trademark. (2) In 2014, the Patent and Trademark Office ("Agency"; "Trademark Office," when referring to the Agency's trademark side; or "Patent Office," when referring to the Agency's patent side) made national headlines when it cancelled the Washington Redskins' trademark registration. (3) In denying federal registration to the term REDSKINS, the Trademark Office held that the term was disparaging to a substantial composite of Native Americans during the time the registration was sought. (4) The Washington Redskins franchise immediately appealed the Agency's decision. (5)

Whether the Trademark Office's cancellation of the mark REDSKINS registration will be upheld in federal court will likely depend intimately upon the application of administrative law to the Agency's decision, (6) at least to the extent the Trademark Act's ban on registering disparaging marks is constitutional. (7) Yet the trademark community has tended to pay little attention to administrative jurisprudence and concomitantly the proper standards of review that should be afforded the Trademark Office's actions. (8) The lack of serious substantive engagement of trademark law with administrative law is surprising, given that Supreme Court intervention in 1999 made clear that standard administrative law norms-including the Administrative Procedure Act ("APA") (9)--applied to the Patent and Trademark Office. (10) This Article begins to rectify this deficiency by starting to explore, in a comprehensive manner, the intersection of trademark and administrative law. (11) With respect to the judicial side of this intersection, this Article examines all federal courts but primarily focuses on the US Court of Appeals for the Federal Circuit ("Federal Circuit"), as this appellate court hears the majority of appeals of Trademark Office decisions. (12)

This Article makes two primary contributions. First, it argues that the Federal Circuit's deference jurisprudence with respect to the Trademark Office's decisions is wrong as a matter of doctrine. More specifically, it contends that the Federal Circuit fails to afford the Trademark Office sufficient deference with respect to both the Agency's legal and factual determinations. (13) Second, this Article posits that the proper application of administrative law principles to the Trademark Office's decisions results in a normatively desirable outcome. (14) Affording the Trademark Office's decisions more deference, and hence elevating the role of the Agency in trademark disputes, ushers the trademark system into the modem administrative era, which has long recognized the deficiencies associated with judge-driven policy. (15) That is, it sets the institutional foundation for infusing evidence-driven policymaking into the trademark system, enabling the tailoring of trademark standards to advance the system's primary goal: decreasing consumer search costs while not overly restricting competition in the marketplace.

The literature's failure to conduct a systematic analysis of the application of administrative law to the Trademark Office's actions is surprising because the stakes are high. Trademarks are the most widely utilized form of intellectual property. (16) Businesses in almost every sector of the economy rely upon trademarks to protect their brands. (17) Although denying federal registration of a mark will not force an organization to stop using the mark or divest a mark from its common law protections, it will almost certainly result in negative legal and financial repercussions to the organization, both in the United States and abroad. (18) Moreover, there are several reasons to believe that the import of federal registration will continue to increase in the future; making the question of what standards of review should govern the Trademark Office's determinations all the more salient. For instance, the Supreme Court recently made clear that the Trademark Office's decision to uphold or deny federal registration of a mark could have preclusive effect on a later infringement action involving the same mark. (19) In addition, several court opinions have suggested that denying federal registration to a mark forecloses the possibility of pursuing a federal unfair competition claim under the Lanham Act-meaning only state law protection would remain. (20) To the extent that the Trademark Office holds certain advantages in crafting the substantive standards of trademark law to reflect the trademark system's normative goals, the standards of deference applied to the Trademark Office's decisions have significant ramifications for the marketplace and for the evolution of trademark law and policy.

The remainder of this Article is structured as follows. Part I introduces the goals of trademark law, the administrative process associated with trademark registration, and the manner in which determinations of registration by the Trademark Office seek to implement those goals. Part II analyzes how existing administrative law jurisprudence applies to the Trademark Office's decision-making. It concludes that the Federal Circuit's deference doctrine is legally incorrect. More specifically, it contends the Federal Circuit fails to afford both the Trademark Office's factual and legal determinations sufficient deference. Part III examines some implications of elevating the role of the Trademark Office in the trademark system. Part IV turns to normative considerations, addressing what form of judicial review of the Trademark Office's decisions would be attractive. This Part maintains that the Trademark Office has a comparative institutional advantage over the Federal Circuit and further argues that the Federal Circuit does not emerge as a clear winner with respect to the comparative risk of interest group influence. Consequently, Part IV concludes that this shift in power dynamics between the Trademark Office and the judiciary that results from the proper application of administrative law jurisprudence to the Trademark Office's decision-making is normatively desirable.

  1. USING TRADEMARK REGISTRATIONS TO IMPLEMENT THE GOALS OF TRADEMARK LAW

    In this Part, I present a brief summary of the primary normative goal of trademark law, the manner in which the inquiry into trademark registration fosters this goal, and the administrative process associated with federal trademark registration.

    1. The Primary Goal of Trademark Law

      According to the dominant view, the primary normative goal of trademark law is to reduce the costs to a consumer of searching for goods that satisfy her preferences without overly restricting marketplace competition. (21) This theory posits that by acting as a repository of information about the source and quality of products, marks diminish consumer deception and confusion while concomitantly decreasing unfair competition to producers. (22) For instance, trademark protection...

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